1. Field of the Invention
The present invention generally relates to a method and system for processing data and in particular, to a method for allocating and distributing royalty/commission payments to resellers/distributors and a computer system for effectuating such allocation and distribution.
2. Description of the Related Art
In order to increase market share, manufacturers including manufacturers of personal computers (PCs) are expanding their business strategy to include a multi-channel sales and distribution system, where a mix of direct and indirect sales channels are employed to distribute their products and services. With the goal of ensuring effective and efficient sales, distribution and support in the expanding and competitive PC market, PC manufacturers use various distribution channels including without limitation OEMs (original equipment manufacturers), value-added resellers (VARs) channel, brick and mortar retail stores, distributors, etc.
With the emergence of the Internet and other technical changes in the marketplace, manufacturers are now able to market and sell products and services xe2x80x9cdirectlyxe2x80x9d to the end user. For example, many OEMs (e.g., personal computer manufacturers) have added a direct sales channel to existing channels in an effort to increase revenues. In selling directly to the end user, manufacturers are competing with its indirect sales force and create what is often referred to as a channel conflict. Accordingly, the direct manufacture is caught between its desire to maximize direct sales and at the same time provide its indirect sales force (e.g., value-added resellers) with adequate incentive to market and sell the product.
Therefore, there is a need to provide a system to address such channel conflict.
The present invention is directed to a method for reducing channel conflict between a manufacturer""s direct sales channel and an indirect sales channel employed by independent retailers or resellers. The method generally includes receiving and filling customer orders through both the indirect and direct sales channel. A defined portion of revenue derived through the direct sales channel is placed into a compensation pool. At the end of each distribution cycle, the compensation pool is distributed among a plurality of sellers in the indirect sales channel based on sales made by such sellers.
In one embodiment, a channel conflict compensation is derived by multiplying an amount of sales commission earned by a particular seller by a ratio of total amount of resources in the compensation pool over total sales commission earned by all qualified sellers in the indirect sales channel (TCP/TSC). In one implementation of this embodiment, a maximum limit of the ratio (TCP/TSC) is set at a predetermined value (e.g., one) to prevent sellers in the indirect sales channel from receiving more channel conflict compensation from the commission pool than their commission compensation realized from their own sales.
The present invention also is directed to an apparatus for tracking sales made by the manufacturer and resellers, compiling such information, calculating the amount of money placed in the compensation pool and allocating to resellers a determined amount.